Sources: U.S. Chamber of Commerce, Washington, D.C.; CP staff
Rising costs, skilled labor shortages, and lack of materials continue to create challenges for general contractors and their clients, sending the U.S. Chamber of Commerce Commercial Construction Index down one point, to 65, in the final quarter of 2021. Revenue expectations, a key driver of the overall score, fell among Index survey respondents for the first time since the start of the pandemic to 58, down three points from Q3.
“One of the most pressing issues facing our economy is the worsening worker shortage crisis, and these findings show that the construction sector, much like other industries, continues to face this challenge,” says Chamber Executive Vice President and Chief Policy Officer Neil Bradley. “It is critical that policymakers invest in programs to upskill and prioritize workers, pass sensible immigration reform, and remove tariffs and other trade barriers so that contractors have the workers and materials they need to get the job done.”
The vast majority (91 percent) of contractors report moderate to high levels of difficulty finding skilled labor, up three points from this summer. More telling is the fact that 62 percent of contractors report high levels of difficulty finding skilled workers, rising seven points
from last quarter, and up 20 points from one year ago. Such challenges are leading to real-world consequences: Almost half (45 percent) of contractors report turning down work because they can’t find enough skilled workers.
A record-high percentage (95 percent) of contractors are experiencing at least one product shortage, up two points from the Q3 survey level, and up 24 points year-over-year. Steel (27 percent) remains the most-reported product shortage followed by roofing material (19 percent) and wood/lumber (17 percent). Heightened concern around the cost of materials remains near an all-time high, as 97 percent of contractors report how cost fluctuations have a moderate-to-high impact on their business. This figure is up 23 points year-over-year. Of survey respondents who note material cost fluctuations as having had an impact on their business, 43 percent cite steel procurement or availability as their top concern.
The Commercial Construction Index is a quarterly economic gauge of nonresidential building outlook and market confidence. It comprises three leading indicators, generating a composite on the scale of 0 to 100 that reflects health of the contractor segment. The Q4 2021 results from the three key drivers are:
• Revenue: Contractors’ revenue expectations over the next 12 months fell to 58 (down three points from Q3 2021).
• New Business Confidence: The overall level of contractor confidence fell to 63 (down one point from Q3 2021).
• Backlog: The ratio of average current to ideal backlog rose three points to 75 (up one point from Q3 2021).
The research was developed with Dodge Data & Analytics, the leading provider of construction industry insights and metrics, by surveying commercial and institutional contractors. The full report, methodology and graphics are posted at www.CommercialConstructionIndex.com.